Austerity failing to achieve results, Ictu says

THE AUSTERITY measures being imposed on the country are causing unnecessary suffering and have no purpose because the programme itself is failing, the Irish Congress of Trade Unions (Ictu) has told the European Commission.

In a letter sent to István Székely, the European Union representative on the troika of the EU, European Central Bank and International Monetary Fund, Ictu general secretary David Begg said Ireland would not quickly or easily recover from the scarring effects of structural unemployment or the breaking up of families as a result of emigration.

He said Ictu believed jobs were “the central economic objective and that this should be the guiding light on the road back to fiscal prudence rather than the deficit reduction being the main objective”.

Mr Begg’s letter, which was sent late last week, was in reply to technical comments made by Mr Székely in response to congress proposals on jobs and growth.

In his letter to Mr Begg, details of which were published in The Irish Times last week, Mr Székely questioned whether large-scale capital investments in Ireland were appropriate at this time.

He also asked why previously high levels of infrastructure investment had not led to improved facilities and outcome for Ireland.

In his reply, Mr Begg wrote that he and Mr Székely were in agreement that there was a fiscal crisis and that the gap between Government revenue and expenditure must be bridged.

“However, we disagree on the timing and methods. You place primary emphasis on this as ‘essential for creating an environment which is conducive to the return of private investment’, whereas we would like to see the state taking a more active role both directly and in leading private investment.

“You infer, incorrectly, that our paper focuses on ‘large scale projects as inappropriate’. We do not advocate any large scale projects, but rather set out areas for investment,” he said.

“These include broadband, public transport, water and waste, and health and education.”

Mr Begg said he disagreed with Mr Székely’s point that the Irish infrastructural deficit had been met and the implication that it was close to or up to European levels, simply because there had been high investment in the past.

“There has been a good level of progress, but we have still not caught up with Europe . . .Ireland’s level of public investment is now the lowest level of all 27 States in the EU (at 9.6 per cent compared to EU 27 average of 18.7 per cent in 2012, per Eurostat) and it will remain close to the lowest level for years.”

He said investment in the health sector over recent years, while high, had been insufficient to overcome the damage inflicted by previous austerity in the late 1980s and early 1990s.

Mr Begg said the risk arising from stimulus was not “leakage to exports from second-round effects” but rather that the money might be saved.